Nigeria Faces Critical Skills Mismatch as Youth Unemployment Reaches 6.5%, ILO Report Reveals

A comprehensive demographic research study conducted by the International Labour Organisation (ILO) has revealed alarming statistics about Nigeria’s employment landscape, showing that the youth unemployment rate in Africa’s most populous nation currently stands at 6.5 percent, with significant gender disparities placing men at 5.4 percent and women at 7.8 percent respectively. These findings underscore the persistent challenges facing young Nigerians as they attempt to enter the workforce and build sustainable careers in an increasingly competitive global economy.

The research, however, revealed even more concerning structural issues within Nigeria’s labour market. Those engaged informally in the employment value chain dominate at a staggering 93 percent, with women, youth, and persons with disabilities disproportionately excluded from decent work opportunities as defined by international labour standards. This massive informal sector presence reflects deep-seated challenges in Nigeria’s economic structure and highlights the urgent need for comprehensive labour market reforms.

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The Skills Mismatch Crisis

The ILO study equally observed that too many graduates possess theoretical knowledge but critically lack practical industry-related competencies that employers actively seek. This fundamental disconnect between educational outcomes and labour market requirements represents one of the most significant barriers to youth employment in Nigeria today. The findings expose a troubling reality: despite investments in education, the country’s training systems are failing to adequately prepare young people for the actual demands of the modern workplace.

These concerning statistics were revealed despite recent improvements in the national unemployment rate, which registered at 4.3 percent, down from 5.4 percent in 2023. While this overall decline suggests some positive momentum in job creation, the persistent elevation of youth unemployment rates indicates that young Nigerians are not benefiting proportionally from whatever economic growth the country is experiencing. This generational employment gap poses serious risks for Nigeria’s long-term economic development and social stability.

Multi-Stakeholder Dialogue on Solutions

The Director of the ILO Country Office for Nigeria, Ghana, Liberia, Sierra Leone, and Liaison Office for ECOWAS, Vanessa Phala, revealed these statistics on Tuesday while speaking at the Multi-Stakeholder National Public Dialogue for Institutionalizing TVET and Apprenticeship Systems for Sustainable Employment and Employability in Nigeria. This high-level gathering brought together government officials, industry leaders, educational institutions, and civil society organizations to address the country’s employment challenges collaboratively.

According to her assertions, these imbalances in the world of work were primarily a result of overqualification in certain areas, underqualification in others, and widespread employment in fields unrelated to workers’ training and education. This misalignment creates a paradoxical situation where qualified individuals struggle to find appropriate employment while businesses cannot locate workers with the specific skills they require. The result is economic inefficiency that hampers both individual prosperity and national development.

Phala, represented at the event by Mrs. Chinyere Emeka-Anuna, Senior Programme Officer at the ILO, also explained that this dire situation necessitated a collaborative workshop with the Federal Ministry of Labour and Employment (FMLE) to bridge some of the observed gaps between education, training, and employment outcomes. The partnership approach reflects a recognition that solving Nigeria’s employment challenges requires coordinated action across multiple sectors and stakeholders rather than isolated initiatives.

The SEESIN Project Framework

According to Phala, the national dialogue is facilitated within the framework of the Strengthening Employment and Employability Systems in Nigeria (SEESIN) project, which is supported by the GIZ-SKYE II Programme, and comes at a crucial time for Nigeria’s economic development. The timing is particularly significant as Nigeria grapples with the aftermath of economic reforms, currency fluctuations, and the need to diversify its economy beyond oil dependence.

She explained that the dialogue offers a critical opportunity to examine how the Technical and Vocational Education and Training (TVET) and apprenticeship systems can better serve the needs of a dynamic and rapidly evolving labour market. In an era of digital transformation, artificial intelligence, and shifting global trade patterns, Nigeria’s workforce development systems must adapt quickly to remain relevant and effective.

According to the ILO Director: “SEESIN is contributing to improving Nigeria’s labour market by strengthening the effectiveness of national employment governance frameworks, addressing skills mismatches, expanding access to quality services, and creating inclusive opportunities for youth, women, and other marginalized groups to thrive in a changing world of work.”

Quality Apprenticeships as a Solution

“This National Dialogue underscores the ILO’s unwavering commitment to advancing Technical and Vocational Education and Training (TVET) and apprenticeship systems as a driver of sustainable employment and inclusive growth,” Phala emphasized. “Guided by the ILO’s Quality Apprenticeships Recommendation, 2023 (No. 208), we are supporting Nigeria in building apprenticeship systems that are well-regulated, inclusive, and responsive to labour market needs.”

The Quality Apprenticeships framework represents international best practices in combining workplace learning with formal education, ensuring that trainees acquire both theoretical knowledge and practical skills. Countries that have successfully implemented robust apprenticeship systems, such as Germany and Switzerland, demonstrate significantly lower youth unemployment rates and smoother school-to-work transitions.

“Through social dialogue and tripartite collaboration involving government, employers, and workers’ organizations, we aim to enhance quality assurance, certification, gender equality and inclusion, and the recognition of informal apprenticeships, ensuring that all, especially young people, women, and persons with disabilities, gain the skills, opportunities, and protection needed to access decent work and contribute meaningfully to national development,” Phala continued.

Understanding Nigeria’s Labour Market Challenges

In setting the context for this critical dialogue, Phala outlined the multifaceted challenges facing Nigeria’s labour market. “Nigeria’s labour market continues to grapple with persistent skills mismatch, where job seekers hold qualifications that do not correspond to the requirements of employers. Many graduates possess theoretical knowledge but lack practical industry-related competencies, resulting in overqualification, underqualification, and employment in unrelated fields.”

This skills mismatch manifests in various ways across the economy. Engineering graduates may find themselves working in retail positions, while businesses in manufacturing and technology sectors struggle to find workers with appropriate technical skills. The phenomenon wastes human capital and contributes to worker dissatisfaction and high turnover rates.

“The country’s apprenticeship and vocational systems remain underdeveloped, contributing to shortages of technical skills in high-growth sectors while producing surpluses in low-demand fields,” she noted. This misallocation of training resources means that educational investments are not yielding optimal returns for either individuals or society. Students spend years acquiring skills that have limited market value while critical skills shortages persist in emerging industries.

The Informal Economy Dominance

“Despite recent improvements in the national unemployment rate, which was 4.3 percent, down from 5.4 percent in 2023, youth unemployment remained elevated at 6.5 percent (men: 5.4 percent, women: 7.8 percent), informal employment dominates at 93 percent, and women, youth, and persons with disabilities are disproportionately excluded from decent work,” Phala explained.

The dominance of informal employment in Nigeria’s economy has profound implications for workers and national development. Informal workers typically lack access to social protection, have no job security, receive lower and more volatile incomes, and face limited opportunities for skill development and career advancement. The high informality rate also limits government tax revenues and makes economic planning more difficult.

The gender gap in youth unemployment, with young women facing a 7.8 percent unemployment rate compared to 5.4 percent for young men, reflects broader patterns of gender inequality in Nigerian society. Women face additional barriers including discriminatory hiring practices, limited access to certain professions, disproportionate domestic responsibilities, and sometimes inadequate educational opportunities. Addressing youth unemployment therefore requires attention to these underlying gender dynamics.

Strategic Investment in Human Capital

“Institutionalising Technical and Vocational Education and Training (TVET) and apprenticeship is a strategic investment in Nigeria’s future,” Phala emphasized. “By equipping youth with relevant skills, we strengthen employability and drive inclusive economic growth. This approach not only bridges the gap between education and industry but also reduces unemployment and positions Nigeria to compete in a rapidly evolving global economy.”

The economic case for investing in skills development is compelling. Countries with strong TVET systems experience higher productivity, greater innovation capacity, and more resilient economies. For Nigeria, with its youthful population—over 60 percent of Nigerians are under 25 years old—investing in skills development represents both an urgent necessity and an enormous opportunity. A well-trained workforce could attract foreign investment, support indigenous entrepreneurship, and drive sustainable economic growth.

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Government’s Renewed Hope Agenda

Meanwhile, the Director of the Skills Development and Certification Department at the Federal Ministry of Labour and Employment, Engr. Tiza Chiila Shaakaa, provided the government’s perspective on these challenges. He noted that the Renewed Hope Agenda of the present administration, led by President Bola Ahmed Tinubu, is expected to be anchored heavily on a workforce that is required to be competent, innovative, and adaptive to rapidly changing technological and economic conditions.

The Renewed Hope Agenda represents the current administration’s comprehensive development strategy, with human capital development positioned as a central pillar. The government recognizes that without a skilled, productive workforce, Nigeria cannot achieve its ambitious goals for economic transformation, poverty reduction, and improved living standards for its citizens.

Shaakaa reiterated that data from national labour surveys reveal that many of Nigeria’s youths remain unemployed or underemployed, not because of lack of ambition or work ethic, but primarily due to a critical mismatch between their skills and labour market demands. This finding contradicts simplistic narratives that blame unemployment on individual failings and instead points to systemic issues in how education and training are structured and delivered.

The Imperative of Continuous Skills Development

According to Shaakaa, the need to skill, reskill, upskill, and cross-skill has become inevitable in today’s rapidly evolving economy. These concepts reflect different dimensions of workforce development: initial skills training for new entrants, retraining for workers whose skills have become obsolete, advanced training to deepen existing skills, and training in complementary skills to increase worker versatility.

The pace of technological change, particularly with artificial intelligence, automation, and digital transformation, means that skills acquired today may become less relevant within years or even months. Continuous learning must become the norm rather than the exception, requiring new approaches to education that emphasize adaptability, critical thinking, and the ability to learn independently.

“Institutionalising TVET and apprenticeship systems will therefore bridge the identified skills mismatch noticed in the workforce,” Shaakaa asserted. “The success of this programme lies in partnership. We must move beyond policy pronouncements to collective action involving all actors: Ministries, Departments and Agencies (MDAs), industries, associations, trade union organizations, the academia, and other social and development partners.”

The Partnership Imperative

This emphasis on partnership reflects a crucial recognition: government alone cannot solve Nigeria’s employment challenges. Effective TVET and apprenticeship systems require active participation from private sector employers who understand current and future skill requirements, educational institutions that can deliver quality training, trade unions that can advocate for workers’ interests and quality standards, and civil society organizations that can reach marginalized groups and ensure inclusive participation.

International experience demonstrates that the most successful TVET systems feature strong employer engagement in curriculum design, workplace-based learning opportunities, and clear pathways from training to employment. Countries like Germany, Switzerland, and Singapore have built world-class apprenticeship systems through precisely this type of multi-stakeholder collaboration.

Addressing Specific Vulnerable Groups

The ILO report’s finding that women, youth, and persons with disabilities are disproportionately excluded from decent work highlights the need for targeted interventions. For women, this might include addressing discriminatory practices, providing childcare support, ensuring equal access to training opportunities, and promoting women’s entrepreneurship. Programs specifically designed to support women’s economic empowerment have proven effective in multiple contexts.

For persons with disabilities, who face among the highest unemployment rates globally, inclusive TVET requires physical accessibility of training facilities, appropriate accommodations and assistive technologies, anti-discrimination enforcement, and awareness-raising among employers about the capabilities of workers with disabilities. The UN Convention on the Rights of Persons with Disabilities provides a framework for ensuring equal opportunities.

Regional and Continental Context

Nigeria’s employment challenges must also be understood within the broader African context. Across the continent, youth unemployment and underemployment represent critical challenges, with the African Development Bank estimating that Africa needs to create millions of jobs annually just to absorb new labour market entrants. The African Continental Free Trade Area (AfCFTA) presents both opportunities and challenges, potentially creating new markets and industries while also increasing competitive pressures.

Nigeria, as Africa’s largest economy and most populous nation, has particular responsibility and opportunity in addressing these challenges. Success in building an effective skills development system could provide a model for other African nations while strengthening Nigeria’s competitive position in regional and global markets.

Digital Skills and the Future of Work

While the ILO report focuses on traditional TVET and apprenticeships, Nigeria’s skills development strategy must also address emerging needs in digital skills. As economies worldwide digitalize, proficiency in information technology, data analysis, digital marketing, and related fields becomes increasingly essential across virtually all sectors.

Nigeria’s large youth population, high mobile phone penetration, and growing technology sector position it well to build digital skills capacity. However, this requires investments in digital infrastructure, particularly in rural areas, reforms in educational curricula to incorporate digital literacy, and programs to ensure women and other marginalized groups have equal access to digital skills training.

The Role of Private Sector and Entrepreneurship

Beyond formal employment, entrepreneurship represents a critical pathway for youth economic participation. Many young Nigerians will create their own employment opportunities rather than working for established businesses. TVET systems must therefore include entrepreneurship training, business skills development, and support for startup creation alongside traditional vocational training.

Nigeria has a vibrant entrepreneurial culture, particularly visible in its growing technology startup ecosystem. Cities like Lagos, Abuja, and Port Harcourt are producing innovative companies addressing local challenges. Connecting TVET systems with this entrepreneurial energy could yield powerful synergies, with vocational training providing technical skills while entrepreneurship education provides business acumen.

Moving Forward: Implementation Challenges

While the national dialogue and SEESIN project represent important steps forward, implementing effective TVET and apprenticeship systems faces significant challenges. These include limited public funding for education and training, inadequate infrastructure and equipment in many training institutions, shortage of qualified instructors, weak linkages between training institutions and industry, and limited monitoring and quality assurance systems.

Additionally, cultural perceptions sometimes devalue vocational education compared to academic pathways, with many Nigerian families preferring university degrees over technical training regardless of labour market realities. Changing these perceptions requires demonstrating that vocational pathways can lead to good careers and decent incomes.

Conclusion: A Call to Action

Nigeria’s youth unemployment crisis and massive skills mismatch represent urgent challenges that threaten the country’s economic future and social stability. However, they also present an opportunity for transformative change. The ILO report and national dialogue provide a roadmap for action, emphasizing quality TVET and apprenticeship systems developed through multi-stakeholder partnerships.

Success will require sustained political commitment, adequate resource allocation, active private sector engagement, and innovative approaches to skills development that prepare young Nigerians for both current labour market needs and future technological and economic shifts. With 6.5 percent youth unemployment, 93 percent informal employment, and millions of young people entering the labour market each year, the stakes could not be higher.

The question facing Nigeria is not whether to invest in skills development, but how quickly and effectively it can build systems that equip its young people with the competencies, opportunities, and protection they need to access decent work and contribute to national prosperity. The answers developed and implemented in the coming years will shape Nigeria’s trajectory for decades to come.

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By: Montel Kamau

Serrari Financial Analyst

22nd October, 2025